Prime Minister Narendra Modi will undertake a visit to Nepal on Saturday with an aim of taking the bilateral relations to a higher level through further cooperation in economic and other areas.

Modi will be in Nepal for two days during which the two countries are expected to sign agreements in sectors like power. India may also announce economic aid for that country.

This will be the first bilateral visit by an Indian Prime Minister to Nepal in 17 years, after I K Gujral had travelled there in June 1997, and underlines Modi’s focus on priority to India’s neighbourhood.

The Prime Minister will hold talks with his Nepalese counterpart Sushil Koirala and have the honour of addressing that country’s Constituent Assembly, only the second foreign leader after former German Chancellor Helmut Kohl who had done it in early 1990s.

He will also address Nepalese business community and visit the famous Pashupatinath Temple where he is expected to participate in a special puja. Modi is also expected to meet leaders of various political parties.

During the trip, India is expected to announce economic assistance and the two sides are likely to sign pacts in sectors like power and culture.

Modi’s visit comes just a week after External Affairs Minister Sushma Swaraj had travelled there. Modi, who has made it clear that neighbourhood will be the priority of his foreign policy, is making Nepal his second foreign destination in bilateral terms after Bhutan. Koirala had attended the swearing-in ceremony of Modi as Prime Minister at the latter’s invitation on May 26.

India is making efforts to boost bilateral ties in all aspects, including defence, security, training, exercises and connectivity. Cooperation in management of common rivers is a key element of India-Nepal ties. India, which at times, faces floods because of the rivers originating in Nepal, has been imparting training to Nepalese officials to deal with the problem. It has given Rs 200 crore to Nepal for the purpose.

Abhay Thakur, Joint Secretary (North) in the MEA, said there is a need for realtime exchange of flood data. “We are ready to extend assistance in this regard,” he said, adding India is already providing assistance on improving embankments of rivers.

The then Prime Minister Atal Bihari Vajpayee had visited Nepal in 2002 but it was in the framework of multilateral SAARC Summit.

External Affairs Ministry spokesman Syed Akbaruddin said India would like to upscale the relationship beyond 2014 amidst its desire to see stable, democratic and peaceful Nepal.